The Kauai regional board of the Hawaii Health Systems Corp. has named a chief executive officer for the region after six years without permanent leadership.
Peter Klune, former CEO of Palo Verde Hospital in California, will become regional CEO of the West Kauai Medical Center, Mahelona Medical Center and West Kauai Clinic-Kalaheo on April 1.
Klune is a consultant with more than 30 years’ experience in health care operations and finance.
"Mr. Klune’s health care experience, combined with his background as a former CPA, contributes to his understanding of the pressing financial issues prevalent in today’s health care market," Patrick Gegen, chairman of the Kauai regional board of the publicly owned HHSC, said Friday. Each region hires its own CEO who serves on the HHSC’s corporate board.
Klune, who wasn’t available for comment, has expertise in operating multiple facility systems as well as small, rural critical-access hospitals, many of which operate as public or district hospitals, HHSC said.
In recent years the Kauai hospitals have had severe financial problems and have taken drastic measures to cut costs, including laying off more than 30 workers last year and implementing a hiring freeze. The region projected an $11 million deficit for 2015 but has since turned around its finances. It has a total workforce of about 430.
HHSC planned to close its Kalaheo primary clinic on Kauai’s South Shore last September, consolidating services due to inadequate funding from the state and rising medical expenses. The company ended up keeping the Kalaheo clinic in operation and is slated to open this spring the West Kauai Medical Clinic at the Shops at Kukuiula.
"We’re actually projected to have $3.9 million to $4 million of working capital as we end fiscal year 2015 on June 30," said interim CEO Scott McFarland.
McFarland said he inherited the Kauai operations in November 2013 when the region had only $11,000 left in its checking account.
Since then the region aggressively has gone after cash collections from Medicare, Medicaid, insurance companies and patients, stopped filling most positions left vacant by attrition and was able to manage operations more efficiently, he said.
"(Klune) is certainly coming into a much more stable operational environment and stable financial situation than I inherited," said McFarland, who exits the post March 31. "The Kauai region has stabilized. It’s figured out its past collections, its cash management and has put itself in the best financial position that it has been in the last five or six years. The Kauai region implemented some important efficiencies and took a thoughtful approach to save money."
McFarland was previously a Kauai region board member who stepped in for 17 months after the departure of the previous interim CEO, Jerry Walker. The last permanent Kauai CEO was Orianna Skomoroch, who left in 2009. McFarland will remain on Kauai as an adviser for health care providers and payers, though he declined to say what his next role will be.
The Kauai region operates Kauai Veterans Memorial Hospital, Samuel Mahelona Memorial Hospital and West Kauai clinics with outpatient locations in Waimea, Port Allen, Kalaheo and Kapaa. HHSC has 13 long-term care and acute-care facilities in addition to a number of physician clinics statewide.
The state approved $7.3 million emergency funding for Kauai’s public hospitals and clinics in 2013 and appropriated another $2.4 million last year to pay vendors. The HHSC system is asking for a $15 million emergency appropriation. Of that, the Kauai region is expected to get about $600,000.
